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JPMorgan to Shell Out Over $1B to Settle Madoff Probe

Five years after Bernie Madoff’s arrest, JPMorgan Chase (JPM) is nearing a deal to pay more than $1 billion in penalties to the Justice Department to put to bed a criminal probe over whether it provided adequate warnings about the Ponzi scheme mastermind, sources confirmed to FOX Business’s Charlie Gasparino.

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A settlement over the Madoff matter would represent another effort by the largest U.S. bank to get out from beneath a cloud of legal and regulatory uncertainty.

A deal could be reached by the end of the year and would also include a deferred-prosecution agreement with U.S. Attorney Preet Bharara.

Investigators have been probing whether JPMorgan reacted sufficiently to red flags in dealings with Madoff and why the bank didn’t provide a formal report about its concerns with U.S. regulators.

JPMorgan is also expected to pay an additional set of fines to U.S. regulators tied to inadequate warnings and control weaknesses even though they tipped off British authorities.

The New York-based lender served as Madoff's bank for 20 years and has been accused of turning a blind eye while Madoff and his client Norman Levy allegedly tried to keep the Ponzi scheme alive.